<PAGE>
As filed with the Securities and Exchange Commission on November 20, 1997
Registration No. 333-____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
------------------------------
PURETEC CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 22-3376449
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification Number)
organization)
65 Railroad Avenue
Ridgefield, New Jersey 07657
(201) 941-6550
(Address, including zip code, and telephone number,
including area code, of registrant's principal
executive offices)
------------------------------
Thomas V. Gilboy
Chief Financial Officer and Vice President
PureTec Corporation
65 Railroad Avenue
Ridgefield, New Jersey 07657
(201) 941-6550
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------------
Approximate date of commencement of proposed sale to the public: From
time to time after this registration statement becomes effective as determined
by market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
============================= ======================= ========================= ========================== =========================
Title of Class of Amount to be Proposed Maximum Proposed Maximum Amount of Registration
Securities to be Registered Registered Offering Price Per Aggregate Offering Fee
Share (1) Price (1)
============================= ======================= ========================= ========================== =========================
<S> <C> <C> <C> <C>
Common Stock (par value 2,235,030 shares $3.08 $6,883,893 $2,087.00
$.01 per share)
============================= ======================= ========================= ========================== =========================
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457(c) under the Securities Act of 1933 based on the
average of the bid and asked prices of the registrant's Common Stock quoted
on The Nasdaq SmallCap Market on November 14, 1997.
The Registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment that specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act or until the registration statement shall become effective on
such date as the Securities and Exchange Commission, acting pursuant to Section
8(a), may determine.
================================================================================
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any state.
SUBJECT TO COMPLETION, DATED NOVEMBER 20, 1997
PROSPECTUS
- ----------
2,235,030 Shares
PureTec Corporation
Common Stock
($.01 Par Value)
--------------
This Prospectus relates to 2,235,030 shares (the "Shares") of Common
Stock, $.01 par value per share (the "Common Stock"), of PureTec Corporation, a
Delaware corporation (the "Company" or "PureTec"). The Shares may be offered by
certain stockholders of the Company (the "Selling Stockholders") from time to
time in transactions for their own account, including transactions on The Nasdaq
SmallCap Market, at market prices prevailing at the time of sale. The Selling
Stockholders may effect any such transactions through broker-dealers and such
broker-dealers may receive compensation in the form of customary commissions.
The Selling Stockholders received the Shares in connection with a private
exchange offer made by the Company to exchange two shares of Common Stock for
each share of Common Stock, $.01 par value per share (the "PS&T Common Stock"),
of Plastic Specialties and Technologies, Inc., a subsidiary of the Company
("PS&T"), beneficially owned by Permitted Offerees (as defined herein). See
"Selling Stockholders" and "Plan of Distribution."
All expenses of registration incurred in connection with this offering
are being borne by the Company. The Company will, however, not be entitled to
any of the proceeds from the sale of the Shares by the Selling Stockholders. See
"Use of Proceeds."
The Common Stock is quoted on The Nasdaq SmallCap Market under the
symbol PURT. The Shares have been approved for trading on The Nasdaq SmallCap
Market.
--------------
FOR A DISCUSSION OF CERTAIN RISKS ASSOCIATED WITH AN
INVESTMENT IN THE SHARES, SEE "RISK FACTORS"
BEGINNING AT PAGE 3.
--------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
--------------
The date of this Prospectus is _______ __, 1997.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files periodic reports, proxy statements and other
information with the Securities and Exchange Commission (the "SEC"). Such
reports, proxy statements and other information can be inspected and copied at
the public reference facilities maintained by the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the regional offices of the SEC at 500 West
Madison Street, 14th Floor, Chicago, Illinois 60661, and Seven World Trade
Center, 13th Floor, New York, New York 10048. Copies of such material can be
obtained from the Public Reference Section of the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. The SEC maintains a Web site that
contains reports, proxy and information statements and other information
regarding registrants, like the Company, that file electronically with the SEC
at the following address: http://www.sec.gov. The Common Stock is quoted on The
Nasdaq SmallCap Market, and such reports, proxy statements and other information
may be inspected at the offices of Nasdaq Operations, 1735 K Street, N.W.,
Washington, D.C. 20006.
The Company has filed a Registration Statement on Form S-3 (together
with all exhibits and amendments thereto, the "Registration Statement") with the
SEC under the Securities Act of 1933, as amended (the "Securities Act") with
respect to the Shares. This Prospectus does not contain all the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the SEC. For further information,
reference is made to the Registration Statement. Statements contained herein
concerning any document filed as an exhibit to the Registration Statement are
not necessarily complete and, in each instance, reference is made to the copy of
such document filed as an exhibit to the Registration Statement. Each such
statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended July
31, 1997 filed by the Company with the SEC on November 13, 1997, as amended by
the Company's Annual Report on Form 10-K/A filed on November 19, 1997, is hereby
incorporated in this Prospectus by reference and shall be deemed to be a part
hereof.
In addition, all documents filed by the Company with the SEC pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date
of this Prospectus and prior to the termination of the offering made by this
Prospectus shall be deemed to be incorporated herein by reference and shall be
deemed to be a part hereof from the date of filing of such documents (such
documents, and the document enumerated above, being herein referred to as
"Incorporated Documents"; provided, however, in each year during which an
offering is made by this Prospectus, all documents filed by the Company pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the filing
with the SEC of the Company's Annual Report on Form 10-K covering such year
shall not be Incorporated Documents or be incorporated by reference in this
Prospectus or be a part hereof from and after the filing of such Annual Report
on Form 10-K). All statements contained herein relating to the Company are
qualified in their entirety by reference to the more detailed information set
forth in the Incorporated Documents.
Any statement contained in an Incorporated Document shall be deemed to
be modified or superseded for all purposes to the extent that a statement
contained herein or in any other subsequently filed Incorporated Document
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as modified or superseded, to constitute
a part of this Prospectus.
2
<PAGE>
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus has been
delivered, on the written or oral request of such person, a copy of any or all
of the Incorporated Documents, other than exhibits to such Incorporated
Documents, unless such exhibits are specifically incorporated by reference into
the information that this Prospectus incorporates. Written or oral requests for
such copies should be directed to: Paul Litwinczuk, Corporate Secretary, PureTec
Corporation, 65 Railroad Avenue, Ridgefield, New Jersey 07657, telephone number
(201) 941-6550.
RISK FACTORS
Risk of Non-completion of Acquisition of PureTec
As discussed herein under "Pending Acquisition of the Company," on
November 11, 1997, the Company and PS&T entered into an Agreement and Plan of
Merger (the "Merger Agreement") with Tekni-Plex, Inc., a private company
("Tekni-Plex"), and P.T. Holding, Inc., a wholly-owned subsidiary of Tekni-Plex
("Sub"), pursuant to which PureTec would become a wholly-owned subsidiary of
Tekni-Plex in a merger transaction (the "Merger"), holders of Common Stock would
receive $3.50 in cash per share in the Merger and Tekni-Plex would assume or
refinance all of the Company's debt. Completion of the Merger, which is
anticipated to occur in the first quarter of 1998, is subject to a number of
conditions, including approval by the Company's stockholders and the receipt of
sufficient financing by Tekni-Plex to pay the merger consideration and complete
the refinancing and other transactions described herein. The Company cannot
assure that the conditions to the Merger will be satisfied.
Failure to complete the Merger may have an adverse effect on the
current trading prices of the Common Stock. In addition, if the Merger Agreement
is terminated and Tekni-Plex exercises its conversion rights under the
Convertible Note issued by PureTec to Tekni-Plex, as described herein, holders
of Common Stock could suffer dilution in an amount that could be significant.
Substantial Leverage
The Company and its subsidiaries have substantial indebtedness. As of
July 31, 1997, the company's ratio of indebtedness to total capitalization was
approximately 73%. The degree to which the Company and its subsidiaries are
leveraged could affect their respective ability to service their indebtedness,
to make capital investments, take advantage of certain business opportunities,
withstand downturns in business or economic cycles or obtain financing necessary
for the Company's businesses. Declines in the future business of the Company and
its subsidiaries, increases in costs or the inability to borrow additional funds
for operations as and when required could impair the ability of the Company and
its subsidiaries to meet their respective debt service obligations and,
therefore, could adversely affect their respective businesses and future
prospects.
Volatility of Price of the Common Stock
The price at which the Common Stock trades, whether on The Nasdaq
SmallCap Market or otherwise, is and will be determined by many factors
including, among other things, the expectation that completion of the Merger
will be achieved, the ability of the Company to service its debt, investor
perception of the Company and the industries in which the Company operates and
general economic and market conditions. Certain of these factors are beyond the
control of the Company. Developments involving these factors may increase the
volatility of, and otherwise adversely affect, the trading prices of the Common
Stock.
3
<PAGE>
Dividends on the Common Stock
The Company has not paid any cash dividends in the last three fiscal
years and through the first quarter of fiscal year 1998 and does not anticipate
paying any cash dividends in the foreseeable future. The Company's ability to
pay dividends is subject to the Company's income, receipt of cash flow from
subsidiaries in the form of dividends or similar distributions, financial
condition and capital needs. The ability of the Company's subsidiaries to pay
cash dividends to the Company is restricted by various indentures and credit
agreements. Due to these restrictions in such indentures and credit agreements,
the Company is effectively precluded from currently paying any material cash
dividend and does not anticipate doing so in the foreseeable future.
THE COMPANY
The Company is a vertically integrated manufacturer of specialty
plastic products. The Company is a leading producer of garden hose, disposable
medical tubing, and precision tubing and gaskets. The Company also produces
plastic materials that are used in various specialized applications, and
high-grade recycled polyethylene terapthalate for packaging and fiber
applications.
The Company's operations consist of two manufacturing categories,
"Plastic Products," with approximately 60% of total sales; and "Plastic
Materials," with approximately 40% of total sales. The Company's major product
lines are listed below, with the manufacturing names in parentheses:
<TABLE>
<CAPTION>
Plastic Products Plastic Materials
<S> <C>
Garden Hose (Colorite Plastics) Medical-grade Vinyl Compounds (Colorite Polymers)
Medical Tubing (Plastron) Specialty Vinyl Polymers (Colorite Polymers; Cyber-tech Polymers)
Specialty Tubing & Gaskets (Action Technology; Recycled Plastics (Pure Tech Plastics)
American Gasket & Rubber)
</TABLE>
Each of these product lines has its own customer base, competitive
environment, cost and pricing structures, business cycles and related business
strategies.
The Company's principal executive offices are located at 65 Railroad
Avenue, Ridgefield, New Jersey 07657, telephone number (201) 941-6550.
The foregoing description is not complete, and is qualified by
reference to the Incorporated Documents, which purchasers of the Shares are
encouraged to review.
PENDING ACQUISITION OF THE COMPANY
On November 11, 1997, the Company announced that it and PS&T had signed
the Merger Agreement with Tekni-Plex and Sub pursuant to which the Company
would, through the Merger, become a wholly-owned subsidiary of Tekni-Plex. The
Merger Agreement provides that the owner of each share of Common Stock would
receive $3.50 in cash for that share in the Merger. The Merger Agreement and the
Merger will be submitted to the stockholders of the Company for approval at a
special meeting of stockholders expected to be held in January 1998. The Merger
Agreement and the Merger have been unanimously approved, and recommended to
stockholders for adoption, by the Company's Board of
4
<PAGE>
Directors. Officers and directors of the Company beneficially owning
approximately 9% of the outstanding Common Stock have agreed to vote their
shares of Common Stock in favor of the Merger.
The Merger Agreement contains a number of conditions that must be
satisfied in order for the Merger to occur, including the successful completion
of a consent solicitation and tender offer (the "Debt Offer") for PS&T's 11.25%
Senior Secured Notes due 2003 (the "PS&T Notes"), the receipt of all necessary
governmental and regulatory approvals, and the absence of any changes occurring
prior to the effective time of the Merger that would have a material adverse
significance with respect to the value of the Company and its subsidiaries,
taken as a whole.
The Merger Agreement also requires that the outstanding minority common
stockholders' interest in PS&T be eliminated, either through purchase or a
short-form merger procedure under Delaware law, not later than immediately prior
to completion of the Merger, at a price of $7.00 per share of PS&T Common Stock.
The Merger is further subject to the receipt by Tekni-Plex of
sufficient financing to pay for the shares of outstanding Common Stock, purchase
the PS&T Notes tendered in the Debt Offer, and fund all other cash requirements
of the Merger. Tekni-Plex has received commitments from Morgan Guaranty Trust
Company of New York to provide senior bank financing and subordinated bridge
loans in an aggregate amount that the parties believe will be sufficient to
complete the Merger, subject to a number of conditions.
The Merger Agreement is terminable by Tekni-Plex, the Company, or
either of them under various circumstances. In the event the Merger Agreement is
terminated because the Company's Board of Directors withdraws or materially
modifies its approval or recommendation of the Merger or the Merger Agreement or
another person, entity or group acquires beneficial ownership of 50% or more of
the outstanding shares of the Common Stock, the Company is obligated to pay a
fee of $10 million to Tekni-Plex and to reimburse Tekni-Plex for up to $5
million of its expenses in connection with the Merger Agreement and related
transactions. The Company expects the Merger to be completed in the first
quarter of 1998, but cannot assure that all of the conditions to the Merger will
be satisfied.
Concurrently with the execution of the Merger Agreement, Tekni-Plex
purchased a convertible note (the "Convertible Note") issued by the Company in
the amount of $5 million. The loan will assist the Company and PS&T in meeting
expected cash requirements in the period prior to completion of the Merger. The
Convertible Note bears interest at 13% and is convertible, at any time following
the 60th day after any termination of the Merger Agreement, into a number of
shares of Common Stock sufficient to retire the principal amount of the
Convertible Note plus accrued interest or, in any event, at a base conversion
rate of one share of Common Stock per $2.72 of obligations owed under the
Convertible Note. The Company is required to file a registration statement with
respect to the Common Stock issuable upon conversion of the Convertible Note
promptly following a termination of the Merger Agreement. The Convertible Note
matures on September 30, 1998. The Convertible Note is subject to prepayment by
the Company in cash at any time and contains covenants and events of default
customary for a debt instrument of this type.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares by the Selling Stockholders. Each Selling Stockholder is entitled to use
the proceeds he or she receives from the sale of the Shares as he or she sees
fit.
5
<PAGE>
SELLING STOCKHOLDERS
Based upon the best information of the Company as of November 14, 1997,
the following table shows (i) the names of the Selling Stockholders and (ii) the
number of Shares which may be offered by each of them pursuant to this
Prospectus (in some instances, Shares are held of record in "street name" by a
broker-dealer or other third party for the account of the beneficial owners
thereof). Based upon the best information of the Company as of November 14,
1997, the number of shares of Common Stock owned of record by each Selling
Stockholder prior to the Offering is the same as the number of Shares being
offered by such Selling Stockholder as shown under the column captioned "Number
of Shares Being Offered" and, therefore, the number of shares of Common Stock to
be owned by any such Selling Stockholder following the sale of all of such
Selling Stockholder's Shares offered pursuant to this Prospectus will be zero.
The Company cannot predict whether or to what extent any of the Selling
Stockholders will offer or sell Shares.
Number of Shares
Selling Stockholder Being Offered
- ------------------- -------------
Merrill Lynch............................................ 830,290
Bear Stearns Securities Corp............................. 325,580
First Union National Bank................................ 220,000
Cudd & Co. c/o The Chase Manhattan Bank.................. 206,568
Goldman Sachs & Co....................................... 133,500
Leslie Alexander......................................... 120,000
Sigler & Co. c/o Chase Manhattan Bank.................... 100,000
Umbwad & Co. c/o Trust Department
United Missouri Bank NA.................................. 40,000
Albert Ginsburg.......................................... 33,840
Neuberger & Berman LLC Cust. For
Haussman Holdings........................................ 33,840
Bost & Co. c/o Mellon Bank............................... 25,220
Joseph Manley & Mary M. Manley JTWROS.................... 24,642
Richard Allerton Jr...................................... 21,500
Lewco Securities Corp.................................... 10,000
Manufacturers & Traders Tr. Co........................... 10,000
Roger E. Birk............................................ 10,000
6
<PAGE>
Number of Shares
Selling Stockholder Being Offered
- ------------------- -------------
Salkeld & Co., Bankers Trust Co.......................... 9,600
Pitt & Co. c/o Bankers Trust Company..................... 9,000
Alan Green............................................... 8,000
George P. Bischoff Ttee George P. Bischoff Living Trust
U/A DTD 4/10/90.......................................... 7,000
MLPF & S Cust. FPO Ronald P. Zarnet IRRA
FBO Ronald P. Zarnet..................................... 6,250
Hudd & Co................................................ 5,000
Richard E. Omohundro Jr. and
Ann B. Omohundro JTWROS.................................. 5,000
Smith Barney Inc......................................... 4,500
MLPF & S Cust FPD CE Meyer Jr.
IRRA FBO CE Meyer Jr. ................................... 4,000
Aniello A. Oliviero...................................... 4,000
ML & Co Sav & Inv Plan Vocon Account
FBO Guy G. Rutherfurd Jr................................. 4,000
Richard A. Fenn.......................................... 4,000
Wilma H. Bitterman and Leonard Bitterman
Ttees U/A 3/29/90 By Wilma H. Bitterman.................. 4,000
Firstcinco c/o Star Bank NA.............................. 4,000
John A. Frabotta & Penny Lou Frabotta JTWROS............. 2,500
Nancy Bolmeier Fisher.................................... 2,500
A. Stephen Otis Ttee U/A DTD 4/13/93 by A. Stephen
Otis..................................................... 2,500
Lydia Green.............................................. 2,000
Albert J. Schneider & Gladys M. Schneider
Ttees Albert J. Schneider Trust U/A DTD 4/14/83.......... 2,000
Hare & Co. c/o The Bank of New York...................... 200
---
Total.............................. 2,235,030
=========
7
<PAGE>
The Selling Stockholders received the Shares in connection with a
private exchange offer (the "Private Exchange Offer") made by the Company to
exchange two shares of Common Stock for each share of PS&T Common Stock
beneficially owned by "accredited investors" (within the meaning of Rule 501(a)
under the Securities Act) who beneficially owned 1000 or more shares of PS&T
Common Stock ("Permitted Offerees") as of the date of the Private Exchange
Offer. The Private Exchange Offer expired on June 18, 1997 and was completed by
the Company on June 27, 1997. Since the Shares were issued in the Private
Exchange Offer pursuant to an exemption from registration under the Securities
Act, the Company undertook, for the benefit of the Selling Stockholders, to
prepare and file with the SEC a shelf registration statement with respect to the
Shares.
DESCRIPTION OF COMMON STOCK
General
The Company is authorized by its Certificate of Incorporation, as
amended, to issue (i) 50,000,000 shares of Common Stock, of which 31,240,866
shares were issued and outstanding as of October 31, 1997, and (ii) 1,000,000
shares of Preferred Stock, par value $.01 per share (the "Preferred Stock"), no
shares of which are presently issued and outstanding.
Dividends
The holders of the Common Stock are entitled to receive dividends as
and when declared by the Board of Directors of the Company (the "Board") out of
funds legally available therefor subject to the rights of holders of any series
of Preferred Stock that may be issued and outstanding. The rights and
preferences of each series of Preferred Stock must be established by the Board
in the resolutions providing for the issuance thereof.
The Company has not paid any cash dividends in the last three fiscal
years and through the first fiscal quarter of 1998 and does not anticipate
paying any cash dividends in the foreseeable future. The Company's ability to
pay dividends is subject to the Company's income, receipt of cash flow from
subsidiaries in the form of dividends or similar distributions, financial
condition and capital needs. The ability of the Company's subsidiaries to pay
cash dividends to the Company is restricted by various indentures and credit
agreements. Due to these restrictions in such indentures and credit agreements,
the Company is effectively precluded from currently paying any material cash
dividends.
Voting Rights
The holders of the Common Stock are entitled to one vote for each share
held of record on all matters submitted to a vote of stockholders. The voting
rights, if any, of any share of Preferred Stock must be established by the Board
in the resolutions providing for the issuance thereof. The holders of the Common
Stock are not entitled to cumulate their votes in electing directors to the
Board. In connection with the signing by the Company of the Merger Agreement,
officers and directors of the Company beneficially owning in the aggregate
approximately 9% of the outstanding Common Stock have given a proxy to
Tekni-Plex to vote their shares of Common Stock in favor of the Merger.
Liquidation, Dissolution or Winding Up
In the event of any liquidation, dissolution or winding up of the
Company, the holders of the Common Stock are entitled to receive pro rata all
assets of the Company, if any, remaining after payment of all debt of the
Company and payment of the full preferential amounts for any series of Preferred
Stock that may be issued and outstanding.
8
<PAGE>
Miscellaneous
The holders of the Common Stock have no preemptive or similar rights to
subscribe for additional securities. There are no redemption or sinking fund
provisions applicable to the Common Stock. The Common Stock currently
outstanding, including the Shares, is validly issued, fully paid and
non-assessable. The Common Stock is quoted on The Nasdaq SmallCap Market and the
Shares have been approved for trading on such market. The American Stock
Transfer & Trust Company is the Transfer Agent and Registrar for the Common
Stock.
PLAN OF DISTRIBUTION
The Shares may be offered for sale by each Selling Stockholder in his
or her discretion, on a delayed or continuous basis, from time to time in
transactions for his or her own account, including transactions on The Nasdaq
SmallCap Market (or any national securities exchange or other organization on
which the Common Stock may then be listed), at market prices prevailing at the
time of sale. Such transactions may be effected by selling the Shares through
broker-dealers, who may receive customary commissions, or in private sales. Each
Selling Stockholder also may pledge Shares as collateral for margin accounts and
such Shares could be resold pursuant to the terms of such accounts. Each Selling
Stockholder and any broker-dealer that participates in the offering of the
Shares may be deemed to be an "underwriter" within the meaning of Section 2(11)
of the Securities Act and a portion of the proceeds of sales and commissions
therefor may be deemed underwriting compensation for purposes of the Securities
Act. The Company will not receive any part of the proceeds from the sale of the
Shares by any Selling Stockholder. The Selling Stockholders are not restricted
as to the price or prices at which they may sell their Shares or as to the
timing or amounts of such sales. Sales of such Shares at less than market prices
may depress the market price of the Common Stock.
LEGALITY OF THE SHARES
The legality of the Shares has been passed upon for the Company by
Winthrop, Stimson, Putnam & Roberts, New York, New York.
EXPERTS
The consolidated financial statements and the related financial
statement schedule incorporated in this Prospectus by reference from the
Company's Annual Report on Form 10-K for the year ended July 31, 1997 as
amended, have been audited by Deloitte & Touche LLP ("Deloitte & Touche"),
independent auditors, as stated in their report, which is incorporated herein by
reference, and have been so incorporated in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.
In addition, the consolidated statements of operations, stockholder's
equity and cash flows of the Company for the year ended July 31, 1995
incorporated in this prospectus by reference include the financial statements of
Styrex Industries, Inc. ("Styrex") (a consolidated subsidiary). These Styrex
financial statements for the year ended July 31, 1995 were audited by Holtz
Rubenstein & Co., LLP ("Holtz Rubenstein"), independent auditors, and the
Deloitte & Touche opinion pertaining to the Company's consolidated financial
statements and the related financial statement schedule, insofar as it relates
to the amounts included for the year ended July 31, 1995, is based solely on the
report of Holtz Rubenstein. Holtz Rubenstein has provided their consent to the
Company for the incorporation by reference of their report pertaining to the
financial statements of Styrex for the year ended July 31, 1995.
9
<PAGE>
<TABLE>
<CAPTION>
============================================================= ===========================================================
<S> <C>
No dealer, salesperson or other individual has been 2,235,030 Shares
authorized to give any information or make any representations
not contained in this Prospectus in connection with the
offering covered by this Prospectus. If given or made, such PureTec Corporation
information or representations must not be relied upon as
having been authorized by the Company. This Prospectus does
not constitute an offer to sell, or a solicitation of an Common Stock
offer to buy, the Shares in any jurisdiction where, or to ($.01 Par Value)
any person to whom, it is unlawful to make such offer or
solicitation. Neither the delivery of this Prospectus nor
any sale made hereunder shall, under any circumstances,
an implication that there has not been any change in the
facts set forth in this Prospectus or in the affairs of the -------------------
Company since the date hereof. P R O S P E C T U S
-------------------
-----------------
TABLE OF CONTENTS _______ __, 1997
-----------------
Page
----
AVAILABLE INFORMATION ...................................2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE .........2
RISK FACTORS.............................................3
THE COMPANY .............................................4
PENDING ACQUISITION OF THE COMPANY.......................4
USE OF PROCEEDS .........................................5
SELLING STOCKHOLDERS.....................................6
DESCRIPTION OF COMMON STOCK..............................8
PLAN OF DISTRIBUTION.....................................9
LEGALITY OF THE SHARES...................................9
EXPERTS..................................................9
============================================================= ===========================================================
</TABLE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.*
<TABLE>
<S> <C>
Securities and Exchange Commission filing fee................................ $ 2,087
Printing and engraving ...................................................... 5,000
Nasdaq SmallCap Market fees.................................................. 7,500
Legal fees and expenses (including blue sky expenses)........................ 10,000
Accounting fees and expenses................................................. 5,000
Miscellaneous expenses....................................................... 5,000
-----
$34,587
=======
</TABLE>
----------------------
* All expenses except for the Securities and Exchange
Commission filing fee are estimated.
Item 15. Indemnification of Directors and Officers.
Article TENTH of the Certificate of Incorporation of the Company, as
amended, and Article IX of the By-laws of the Company provide in part that the
Company shall indemnify its directors, officers, employees and agents to the
fullest extent permitted by the General Corporation Law of the State of Delaware
(the "DGCL").
Section 145 of the DGCL permits a corporation, among other things, to
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the corporation), by reason of the fact that the person is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred in connection with such action,
suit or proceeding if the person acted in good faith and in a manner the person
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe the person's conduct was unlawful.
A corporation also may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that the person is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against expenses (including attorneys'
fees) actually and reasonably incurred by the person in connection with the
defense or settlement of such action or suit if the person acted in good faith
and in a manner the person reasonably believed to be in or not opposed to the
best interests of the corporation. However, in such an action by or on behalf of
a corporation, no indemnification may be made in respect of any claim, issue or
matter as to which the person is adjudged liable to the corporation unless and
only to the extent that the court determines that, despite the adjudication of
liability but in view of all the circumstances, the person is fairly and
reasonably entitled to indemnity for such expenses which the court shall deem
proper.
II-1
<PAGE>
In addition, the indemnification and advancement of expenses provided
by or granted pursuant to Section 145 shall not be deemed exclusive of any other
rights to which those seeking indemnification or advancement of expenses may be
entitled under any by-law, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office.
The Company has an insurance policy covering its liabilities and
expenses that might arise in connection with its lawful indemnification of its
directors and officers for certain of their liabilities and expenses. Officers
and directors of the Company are covered under this policy for certain other
liabilities and expenses.
Item 16. Exhibits.
2 Agreement and Plan of Merger dated as of November 11, 1997 among the
Company, Plastic Specialties & Technologies, Inc., Tekni-Plex, Inc. and
PT Holding, Inc. (incorporated by reference from Exhibit 10.1 of the
Company's Annual Report on Form 10-K for the fiscal year ended July 31,
1997, as amended by the Company's Annual Report on Form 10-K/A, file
no. 0-26508).
4(a) Certificate of Incorporation of the Company, as amended (incorporated
by reference from Exhibit 3(a) of the Company's registration statement
on Form S-4, file no. 33-82768, and from Exhibits 3.1, 3.2 and 3.3 of
the Company's Annual Report on Form 10-K for the fiscal year ended July
31, 1997, as amended by the Company's Annual Report on Form 10-K/A,
file no. 0-26508).
4(b) By-laws of the Company (incorporated by reference from Exhibit 3(b) of
the Company's registration statement on Form S-4, file no. 33-82768,
and from Exhibit 3.2 of the Company's Annual Report on Form 10-K for
the fiscal year ended July 31, 1997, as amended by the Company's Annual
Report on Form 10-K/A, file no. 0-26508).
5 Opinion of Winthrop, Stimson, Putnam & Roberts as to the legality of
the securities being registered.
23(a) Consent of Deloitte & Touche LLP.
23(b) Consent of Holtz Rubenstein & Co., LLP.
23(c) Consent of Winthrop, Stimson, Putnam & Roberts (contained in
Exhibit 5).
24 Power of Attorney (included on the signature page hereof).
99 Stockholder and Voting Option Agreement dated as of November 11, 1997
between Tekni-Plex, Inc. and the stockholders of the Company listed
therein.
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
II-2
<PAGE>
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 that are incorporated by reference
in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report pursuant
to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of such registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Ridgefield, State of New Jersey on the 19th day of
November, 1997.
PURETEC CORPORATION
By:/s/ Thomas V. Gilboy
------------------------------------------
Thomas V. Gilboy
Chief Financial Officer and Vice President
II-4
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Thomas V. Gilboy his true and lawful
attorney-in-fact and agent, with full and several power of substitution, for him
and in his name, place and stead, in any and all capacities, to sign any or all
amendments, including post-effective amendments, and supplements to this
Registration Statement, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as
they or he might or could do in person, hereby ratifying and confirming all that
said attorney-in-fact and agent or his or their substitute or substitutes, may
lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Fred W. Broling Chairman, Chief Executive Officer and November 11, 1997
- -------------------------------------- Director (principal executive officer)
Fred W. Broling
/s/ Thomas V. Gilboy Chief Financial Officer and Vice November 11, 1997
- -------------------------------------- President (principal financial and
Thomas V. Gilboy accounting officer)
/s/ David C. Katz President, Chief Operating Officer and November 11, 1997
- -------------------------------------- Director
David C. Katz
/s/ Murray J. Fox Director and Vice President November 11, 1997
- --------------------------------------
Murray J. Fox
/s/ Leo Gans Director and Vice President November 11, 1997
- --------------------------------------
Leo Gans
Director and Vice President
- --------------------------------------
Robert L. Guyett
Director
- --------------------------------------
Werner Haase
/s/ Edward G. Hamway, Jr. Director November 11, 1997
- --------------------------------------
Edward G. Hamway, Jr.
Director
- --------------------------------------
John J. Harvey
Director
- --------------------------------------
Peter R. Harvey
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
2 Agreement and Plan of Merger dated as of November 11, 1997 among the
Company, Plastic Specialties & Technologies, Inc., Tekni-Plex, Inc. and
PT Holding, Inc. (incorporated by reference from Exhibit 10.1 of the
Company's Annual Report on Form 10-K for the fiscal year ended July 31,
1997, as amended by the Company's Annual Report on Form 10-K/A, file
no. 0-26508).
4(a) Certificate of Incorporation of the Company, as amended (incorporated
by reference from Exhibit 3(a) of the Company's registration statement
on Form S-4, file no. 33-82768, and from Exhibits 3.1, 3.2 and 3.3 of
the Company's Annual Report on Form 10-K for the fiscal year ended July
31, 1997, as amended by the Company's Annual Report on Form 10-K/A,
file no. 0-26508).
4(b) By-laws of the Company (incorporated by reference from Exhibit 3(b) of
the Company's registration statement on Form S-4, file no. 33-82768,
and from Exhibit 3.2 of the Company's Annual Report on Form 10-K for
the fiscal year ended July 31, 1997, as amended by the Company's Annual
Report on Form 10-K/A, file no. 0-26508).
5 Opinion of Winthrop, Stimson, Putnam & Roberts as to the legality of
the securities being registered.
23(a) Consent of Deloitte & Touche LLP.
23(b) Consent of Holtz Rubenstein & Co., LLP.
23(c) Consent of Winthrop, Stimson, Putnam & Roberts (contained in
Exhibit 5).
24 Power of Attorney (included on the signature page hereof).
99 Stockholder and Voting Option Agreement dated as of November 11, 1997
between Tekni-Plex, Inc. and the stockholders of the Company listed
therein.
II-6
<PAGE>
Exhibit 5
[Letterhead of Winthrop, Stimson, Putnam & Roberts]
November 19, 1997
PureTec Corporation
65 Railroad Avenue
Ridgefield, New Jersey 07657
Ladies and Gentlemen:
We have acted as counsel for PureTec Corporation, a Delaware
corporation (the "Company"), in connection with the filing by the Company with
the Securities and Exchange Commission (the "Commission") on behalf of certain
stockholders of the Company of a Registration Statement on Form S-3 (the
"Registration Statement") under the Securities Act of 1933 (the "Securities
Act") relating to 2,235,030 shares of Common Stock, par value $.01 per share, of
the Company (the "Shares").
We are members of the Bar of the State of New York and we express no
opinion as to any matters governed by any laws other than the federal laws of
the United States, the laws of the State of New York and the General Corporation
Law of the State of Delaware. We have reviewed originals (or copies certified or
otherwise identified to our satisfaction) of the Registration Statement, the
Certificate of Incorporation of the Company, as amended, the By-laws of the
Company, corporate documents, records and papers, certificates of public
officials and certificates of officers of the Company. In rendering this
opinion, we have assumed the validity of and relied upon the representations of
the Company as to certain factual matters relevant hereto.
We assume that appropriate action will be taken, prior to the offer and
sale of the Shares by certain stockholders of the Company, to register and
qualify the Shares for sale under all applicable state securities laws.
We are of the opinion that, under the General Corporation Law of the
State of Delaware, the Shares are, and after the sale and delivery of the Shares
by the owners thereof, will be, validly issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving this consent, we do not thereby admit that we
come within the category of persons whose consent is required under Section 7 of
the Securities Act of 1933 or the rules and regulations of the Commission.
Very truly yours,
/s/ Winthrop, Stimson, Putnam & Roberts
<PAGE>
Exhibit 23(a)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of PureTec Corporation on Form S-3 of our report dated November 13,
1997, appearing in the Annual Report on Form 10-K of PureTec Corporation for the
year ended July 31, 1997, as amended and to the reference to us under the
heading "Experts" in the Prospectus, which is part of this Registration
Statement.
Deloitte & Touche LLP
Parsippany, New Jersey
November 20, 1997
<PAGE>
Exhibit 23(b)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of PureTec Corporation on Form S-3 of our report dated September 12,
1995, appearing in the Annual Report on Form 10-K of PureTec Corporation for the
year ended July 31, 1997, as amended and to the reference to us under the
heading "Experts" in the Prospectus, which is part of this Registration
Statement.
Holtz Rubenstein & Co., LLP
Melville, New York
November 20, 1997
<PAGE>
STOCKHOLDER VOTING AND OPTION AGREEMENT
AGREEMENT, dated as of November 11, 1997 between Tekni-Plex, Inc., a
Delaware corporation ("Buyer"), and the persons listed on the signature pages
hereto (each a "Stockholder" and collectively the "Stockholders").
WHEREAS, in order to induce Buyer and P.T. Holding, Inc., a Delaware
corporation and a wholly-owned subsidiary of Buyer ("Merger Subsidiary"), to
enter into an Agreement and Plan of Merger, dated as of the date hereof (the
"Merger Agreement"), with PureTec Corporation, a Delaware corporation (the
"Company"), Buyer has requested the Stockholders, and the Stockholders have
agreed, to enter into this Agreement with respect to all shares of common stock,
par value $0.01 per share, of the Company (the "Common Stock") that such
Stockholders beneficially own and any additional shares acquired by the
Stockholders (whether by purchase or otherwise) after the date of this Agreement
(the "Shares").
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
GRANT OF PROXY; VOTING AGREEMENT; AGREEMENT TO REPAY LOANS
SECTION 1.1. Voting Agreement. (a) Each Stockholder hereby agrees to
vote all Shares that such Stockholder is entitled to vote, in favor of the
approval and adoption of the Merger Agreement, the Merger and all agreements
related to the Merger and any actions related thereto at any meeting of the
stockholders of the Company, and at any adjournment thereof, at which such
Merger Agreement and other related agreements (or any amended version thereof),
or such other actions, are submitted for the consideration and vote of the
stockholders of the Company. Each Stockholder hereby agrees that, from the date
hereof until the earlier of (x) the consummation of the Merger and (y) the
termination of the Merger Agreement it will not vote any Shares in favor of the
approval of any (i) Acquisition Proposal, (ii) reorganization, recapitalization,
liquidation or winding up of the Company or any other extraordinary transaction
involving the Company, (iii) corporate action the consummation of which would
frustrate the purposes, or prevent or delay the consummation, of the
transactions contemplated by the
<PAGE>
Merger Agreement or (iv) other matter relating to, or in connection with, any of
the foregoing matters.
(b) The Stockholders make no agreement or understanding herein in their
capacities as directors or officers of the Company. Each Stockholder signs
solely in his capacity as a recordholder and/or beneficial owner of Shares, and
nothing herein shall limit or affect any actions taken in such Stockholder's
capacity as an officer or director of the Company.
SECTION 1.2. Irrevocable Proxy. Each Stockholder hereby revokes any and
all previous proxies granted with respect to the Shares. By entering into this
Agreement, each Stockholder hereby grants a proxy appointing Buyer as such
Stockholder's attorney-in-fact and proxy, with full power of substitution, for
and in such Stockholder's name, to vote, express, consent or dissent, or
otherwise to utilize such voting power in the manner contemplated by Section
1.01 above as Buyer or its proxy or substitute shall, in Buyer's sole
discretion, deem proper with respect to such Stockholder's Shares. The proxy
granted by each Stockholder pursuant to this Article 1 is irrevocable and is
granted in consideration of Buyer entering into this Agreement and the Merger
Agreement and incurring certain related fees and expenses. The proxy granted by
each Stockholder shall be automatically revoked upon termination of the voting
agreement of such Stockholder set forth in Section 1.01.
SECTION 1.3. Agreement to Repay Loans. (a) Each Stockholder hereby
agrees to repay in full any amounts, whether or not then due, borrowed from or
otherwise owed to the Company or any Subsidiary prior to or simultaneously with
the consummation of the Merger, unless such amounts owed have been offset in
accordance with Section 1.03(b).
(b) Each Stockholder hereby agrees and consents to the Company and its
Subsidiaries offsetting any amounts owed, in any form, (including, without
limitation, any Merger Consideration or amounts owed pursuant to Section 1.05(a)
of the Merger Agreement or the plans and programs referred to in Section 5.08 of
the Merger Agreement) to such Stockholder by the Company or any Subsidiary, with
any amounts owed by such Stockholder to the Company or any Subsidiary whether or
not then due and payable. Each Stockholder further agrees to fully cooperate
with Buyer to effect the offset described herein and to execute and deliver, or
cause to be executed and delivered, all further documents and instruments
necessary or advisable to effect such offset.
ARTICLE 2
<PAGE>
STOCK OPTION
SECTION 2.1. Grant of Stock Option. (a) Each Stockholder hereby grants
to Buyer an irrevocable option (the "Option") to purchase all of such
Stockholder's Shares at a purchase price of $3.50 per Share (the "Purchase
Price").
(b) Upon the written request of Buyer, each Stockholder agrees to
exercise its rights under any options, warrants or other securities convertible
into shares of Common Stock (each a "Convertible Security") immediately prior to
the Merger. Any Common Stock issued upon the conversion of any Convertible
Security shall be deemed to be Shares subject to the terms of this Agreement.
SECTION 2.2. Exercise of Option. (a) Subject to the conditions set
forth in Section 2.05 hereof, the Option may be exercised by Buyer, in whole or
in part, at any time or from time to time after the date hereof and on or prior
to the later of (i) the 30th day after the termination of the Merger Agreement
and (ii) in the event an Acquisition Proposal is made to the Company at any time
prior to the 30th day after the termination of the Merger Agreement, the 90th
day after the termination of the Merger Agreement (the "Option Expiry Date"). In
the event Buyer wishes to exercise the Option for all or some of the Shares,
Buyer shall send a written notice (the "Exercise Notice") to the Escrow Agent
(as defined in Section 2.04) specifying the total number of Shares it wishes to
purchase pursuant to such exercise and the place, the date (not less than one
nor more than 20 business days from the date of the Exercise Notice), and the
time for the closing of such purchase, provided that such date and time may be
earlier than one day after the Exercise Notice if reasonably practicable. Each
closing of a purchase of Shares (an "Option Closing") shall take place at the
place, on the date and at the time designated by Buyer in its Exercise Notice,
provided that if, at the date of the Option Closing herein provided for, the
conditions set forth in Section 2.05 shall not have been satisfied (or waived by
the Stockholder), Buyer may postpone the Option Closing until a date within five
business days after such conditions are satisfied.
(b) Buyer shall not be under any obligation to deliver any Exercise
Notice and may allow the Option to terminate without purchasing any Shares
hereunder; provided however that once Buyer has delivered to the Stockholders an
Exercise Notice, subject to the terms and conditions of this Agreement, Buyer
shall be bound to effect the purchase as described in such Exercise Notice.
SECTION 2.3. Option Closing. (a) Each Stockholder shall cause the
Escrow Agent to deliver to Buyer a certificate or certificates (the
"Certificates") representing (or cause to be made book entry delivery to an
account designated by
3
<PAGE>
Buyer of) such Stockholder's Shares, in the case of certificates, duly endorsed
or accompanied by stock powers duly executed in blank and (b) Buyer shall
deliver to each Stockholder a certified or bank cashier's check or checks
payable to or upon the order of such Stockholder in an amount equal to (i) the
number of Shares being purchased from such Stockholder at such Option Closing
multiplied by (ii) the Purchase Price (the "Purchase Amount").
SECTION 2.4. Deposit in Escrow. Upon request, each Stockholder shall
execute and deliver to the Buyer and the escrow agent (the "Escrow Agent") a
copy of an Escrow Agreement substantially in the form attached hereto as Annex A
with such modifications as the Escrow Agent may require (the "Escrow Agreement")
and deliver a certificate or certificates representing (or cause book entry
delivery to be made to an account designated by the Escrow Agent of) all of such
Stockholder's Shares to the Escrow Agent, duly endorsed in blank for transfer
pursuant to the Escrow Agreement. In addition, each Stockholder shall promptly
deliver certificates representing any additional Shares acquired after the date
hereof to the Escrow Agent, duly endorsed in blank for transfer pursuant to the
Escrow Agreement. All Shares so delivered to the Escrow Agent shall remain
subject to the Escrow Agreement until the earlier of (i) the purchase of such
Shares by the Buyer hereunder or (ii) the expiry of the Option.
SECTION 2.5. Conditions to Stockholders' Obligations. The obligation of
each Stockholder to sell Shares at any Option Closing is subject to the
following conditions:
(a) The representations and warranties of Buyer contained in
Article 4 shall be true and correct in all material respects on the
date thereof.
(b) All waiting periods under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules and regulations
promulgated thereunder (the "HSR Act") applicable to such exercise of
the Option shall have expired or been terminated.
(c) There shall be no preliminary or permanent injunction or
other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency
or commission, nor any statute, rule, regulation or order promulgated
or enacted by any governmental authority, prohibiting or otherwise
restraining such exercise of the Option.
Section 2.6. Adjustment Upon Change in Capitalization or Merger. In the
event of any change in the Company's capital stock by reason of stock dividends,
stock splits, mergers, consolidations, recapitalizations, combinations,
4
<PAGE>
conversions, exchanges of shares, extraordinary or liquidating dividends, or
other changes in the corporate or capital structure of the Company which would
have the effect of diluting or changing the Buyer's rights hereunder (excluding
any effects of conversion of the Convertible Note), the number and kind of
shares or securities subject to the Option and the purchase price per Share (but
not the total purchase price) shall be appropriately and equitably adjusted so
that the Buyer shall receive upon exercise of the Option the number and class of
shares or other securities or property that the Buyer would have received in
respect of the Shares purchasable upon exercise of the Option if the Option had
been exercised immediately prior to such event. Each Stockholder shall take such
steps in connection with such consolidation, merger, liquidation or other such
action as may be necessary to assure that the provisions hereof shall thereafter
apply as nearly as possible to any securities or property thereafter deliverable
upon exercise of the Option.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS
Each Stockholder represents and warrants to Buyer that:
Section 3.1. Authorization. If such Stockholder is a corporate entity,
the execution, delivery and performance by such Stockholder of this Agreement
and the consummation by such Stockholder of the transactions contemplated hereby
are within the corporate powers of such Stockholder and have been duly
authorized by all necessary corporate action. If such Stockholder is married and
the Shares set forth on the signature page hereto opposite such Stockholder's
name constitute community property under applicable laws, this Agreement has
been duly authorized, executed and delivered by, and constitutes the valid and
binding agreement of, such Stockholder's spouse. If this Agreement is being
executed in a representative or fiduciary capacity, the Person signing this
Agreement has full power and authority to enter into and perform this Agreement.
Section 3.2. Non-Contravention. The execution, delivery and performance
by such Stockholder of this Agreement and the consummation of the transactions
contemplated hereby do not and will not (i) if such Stockholder is a
corporation, violate the certificate of incorporation or bylaws of such
Stockholder, (ii) violate any applicable law, rule, regulation, judgment,
injunction, order or decree, (iii) require any consent or other action by any
Person under, constitute a default under, or give rise to any right of
termination, cancellation or acceleration or to a loss of any benefit to which
such Stockholder is entitled under any
5
<PAGE>
provision of any agreement or other instrument binding on such Stockholder or
(iv) result in the imposition of any Lien on any asset of such Stockholder.
Section 3.3. Ownership of Shares. Such Stockholder is the sole, true,
lawful, record and beneficial owner of such Stockholder's Shares and Convertible
Securities, free and clear of any Lien and any other limitation or restriction
(including any restriction on the right to vote or otherwise dispose of such
Shares or Convertible Securities, as applicable). None of such Shares or
Convertible Securities is subject to any voting trust or other agreement or
arrangement with respect to the voting of such Shares. At any Option Closing,
such Stockholder will convey good and valid title to such Shares and Convertible
Securities being purchased free and clear of any and all claims, liens, charges,
encumbrances and security interests. None of such Shares or Convertible
Securities is subject to any voting trust or other agreement or arrangement with
respect to the voting of such Shares.
Section 3.4. Total Shares. Except for the Shares and Convertible
Securities set forth below such Stockholder's name on the signature page hereto,
such Stockholder does not beneficially own any (i) shares of capital stock or
voting securities of the Company, (ii) securities of the Company convertible
into or exchangeable for shares of capital stock or voting securities of the
Company or (iii) options or other rights to acquire from the Company any capital
stock, voting securities or securities convertible into or exchangeable for
capital stock or voting securities of the Company.
Section 3.5. Binding Effect. This Agreement is the valid and binding
Agreement of each Stockholder, enforceable against each Stockholder in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, moratorium or other similar laws relating to creditors' rights
generally.
Section 3.6. Finder's Fees. No investment banker, broker, finder or
other intermediary is entitled to a fee or commission from Buyer or the Company
in respect of this Agreement based upon any arrangement or agreement made by or
on behalf of any Stockholder.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to the Stockholders:
6
<PAGE>
Section 4.1. Corporate Authorization. The execution, delivery and
performance by Buyer of this Agreement and the consummation by Buyer of the
transactions contemplated hereby are within the corporate powers of Buyer and
have been duly authorized by all necessary corporate action. This Agreement
constitutes a valid and binding Agreement of Buyer.
ARTICLE 5
COVENANTS OF STOCKHOLDERS
Each Stockholder hereby covenants and agrees that:
Section 5.1. No Proxies for or Encumbrances on Shares. Until the expiry
of the Option, except pursuant to the terms of this Agreement, such Stockholder
shall not, without the prior written consent of Buyer, directly or indirectly,
(i) grant any proxies or enter into any voting trust or other agreement or
arrangement with respect to the voting of any Shares or (ii) sell, assign,
transfer, encumber or otherwise dispose of, or enter into any contract, option
or other arrangement or understanding with respect to the direct or indirect
sale, assignment, transfer, encumbrance or other disposition of, any Shares. No
Stockholder shall seek or solicit any such sale, assignment, transfer,
encumbrance or other disposition or any such contract, option or other
arrangement or understanding except as provided herein and each Stockholder
agrees to notify Buyer promptly, and to provide all details requested by Buyer,
if such Stockholder shall be approached or solicited, directly or indirectly, by
any Person with respect to any of the foregoing.
Section 5.2. Appraisal Rights. Each Stockholder agrees not to exercise
any rights (including, without limitation, under Section 262 of the General
Corporation Law of the State of Delaware) to demand appraisal of any Shares
which may arise with respect to the Merger. Each Stockholder agrees and consents
to the actions taken by the Company with respect to the treatment of such
Stockholder's Convertible Securities in connection with the Merger.
ARTICLE 6
MISCELLANEOUS
Section 6.1. Further Assurances. Buyer and each Stockholder will each
execute and deliver, or cause to be executed and delivered, all further
documents
7
<PAGE>
and instruments and use its best efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations, to consummate and make
effective the transactions contemplated by this Agreement.
Section 6.2. Amendments. Any provision of this Agreement may be amended
or waived if, but only if, such amendment or waiver is in writing and is signed,
in the case of an amendment, by each party to this Agreement or in the case of a
waiver, by the party against whom the waiver is to be effective.
Section 6.3. Expenses. All costs and expenses incurred in connection
with this Agreement shall be paid by the party incurring such cost or expense.
Section 6.4. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of the other parties hereto, except that Buyer may transfer
or assign its rights and obligations to any wholly-owned subsidiary of Buyer.
Section 6.5. Governing Law. This Agreement shall construed in
accordance with and governed by the laws of the State of Delaware.
Section 6.6. Counterparts; Effectiveness. This Agreement may be signed
in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective as to each Stockholder when such
Stockholder shall have executed and delivered to Buyer a counterpart hereof
signed by such Stockholder regardless of whether any other Stockholder has
signed or does not sign this Agreement.
Section 6.7. Severability. If any term, provision or covenant of this
Agreement is held by a court of competent jurisdiction or other authority to be
invalid, void or unenforceable, the remainder of the terms, provisions and
covenants of this Agreement shall remain in full force and effect and shall in
no way be affected, impaired or invalidated.
Section 6.8. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement is
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof in addition to any other
remedy to which they are entitled at law or in equity.
Section 6.9. Additional Agreements. Subject to the terms and conditions
of this Agreement, each of the parties hereto agrees to use all reasonable
efforts to
8
<PAGE>
take, or cause to be taken, all action and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations and
which may be required under any agreements, contracts, commitments, instruments,
understandings, arrangements or restrictions of any kind to which such party is
a party or by which such party is governed or bound, to consummate and make
effective the transactions contemplated by this Agreement, to obtain all
necessary waivers, consents and approvals and effect; all necessary
registrations and filings, including, but not limited to, filings under the HSR
Act, responses to requests for additional information related to such filings,
and submission of information requested by governmental authorities, and to
rectify any event or circumstances which could impede consummation of the
transactions contemplated hereby.
Section 6.10. Notices. All notices, requests, claims, demands and other
communications hereunder shall be deemed to have been duly given when delivered
in person, by cable, telegram or telex, or by registered or certified mail
(postage prepaid, return receipt requested) to PureTec Corporation, 65 Railroad
Avenue, Ridgefield, New Jersey 07657 and, in the case of any notice to any
Stockholder, with a copy to David P. Falck, Winthrop, Stimson, Putnam & Roberts,
One Battery Park Plaza, New York, NY 10004-1490.
Section 6.11. Survival of Representations and Warranties. All
representations and warranties contained in this Agreement shall survive
delivery of and payment for the Shares.
Section 6.12. Capitalized Terms. Capitalized terms used but not defined
herein shall have the respective meanings set forth in the Merger Agreement.
9
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
TEKNI-PLEX, INC.
By: /s/ Dr. F. Patrick Smith
-------------------------------------------------
Name: Dr. F. Patrick Smith
Title: Chairman and Chief Executive
Officer
/s/ Fred Broling
-------------------------------------------------
Name: Fred Broling
Shares Convertible
Owned Securities Owned
----- ----------------
1,450,753 200,000
/s/ David Katz
-------------------------------------------------
Name: David Katz
Shares Convertible
Owned Securities Owned
----- ----------------
9,900 208,300
/s/ Murray Fox
-------------------------------------------------
Name: Murray Fox
Shares Convertible
Owned Securities Owned
----- ----------------
649,556 84,000
10
<PAGE>
/s/ Leo Gans
-------------------------------------------------
Name: Leo Gans
Shares Convertible
Owned Securities Owned
----- ----------------
427,394 150,000
/s/ Robert Guyett
-------------------------------------------------
Name: Robert Guyett
Shares Convertible
Owned Securities Owned
----- ----------------
30,000 10,000
/s/ Werner Haase
-------------------------------------------------
Name: Werner Haase
Shares Convertible
Owned Securities Owned
----- ----------------
60,000 30,000
/s/ Edward Hamway
-------------------------------------------------
Name: Edward Hamway
Shares Convertible
Owned Securities Owned
----- ----------------
3,000 20,000
/s/ Thomas Gilboy
-------------------------------------------------
Name: Thomas Gilboy
Shares Convertible
Owned Securities Owned
----- ----------------
10,400 200,000
11
<PAGE>
/s/ Paul Litwinczuk
-------------------------------------------------
Name: Paul Litwinczuk
Shares Convertible
Owned Securities Owned
----- ----------------
115 79,000
Recycling Enterprises, Inc.
By: /s/ Murray T. Fox
-------------------------------------------------
Name: Murray T. Fox
Title: President
Shares Convertible
Owned Securities Owned
----- ----------------
25,649 0
12
<PAGE>
ANNEX A
to Stockholder Voting
and Option Agreement
ESCROW AGREEMENT
AGREEMENT dated as of ___________, 19___ among Tekni-Plex, Inc., a
Delaware corporation ("Buyer"), [name of stockholder] (the "Stockholder") and
[name of escrow bank] (the "Escrow Agent").
The parties hereto hereby agree as follows:
1. (a) Pursuant to Section 2.04 of the Stockholder Voting and Option
Agreement dated as of November 11, 1997 among Buyer, the Stockholder and the
other stockholders listed on the signature pages thereto (the "Stockholder
Agreement"), the Stockholder hereby delivers to the Escrow Agent a certificate
or certificates representing the Shares held by such Stockholder (the
"Certificates"). The Escrow Agent hereby acknowledges receipt of the
Certificates in escrow pursuant to the terms and conditions of this Agreement.
2. (a) Upon receipt of (i) a certificate of the Buyer stating that (x)
all conditions set forth in the Stockholder Agreement have been met or waived
pursuant to the terms thereof and (y) the Buyer has tendered the Purchase Price
as provided therein and (ii) evidence from the Buyer that the Purchase Price has
been so tendered, the Escrow Agent will deliver to the Buyer the Certificates.
(b) The Escrow Agent will deliver the Certificates to the Buyer upon
receipt of the certificate and evidence provided for paragraph 2(a) above in
accordance with this Section 2, notwithstanding any claim given to, or demand
made upon, the Escrow Agent or any action taken or threatened to be taken by any
other person or entity. The Escrow Agent's obligation to so deliver such
Certificates shall survive the death, disability, incapacity, incompetence or
other circumstance relating to the Stockholder.
(c) The Buyer will deliver simultaneously to the Stockholder copies of
all certificates, evidences and instructions delivered to the Escrow Agent
hereunder.
3. Except pursuant to the terms and conditions of this Agreement or by
joint written instructions signed by all parties hereto, the Escrow Agent shall
not sell, transfer or otherwise dispose of in any manner the Shares.
<PAGE>
4. The duties and obligations of the Escrow Agent shall be determined
solely by the express provisions of this Agreement and the Escrow Agent shall
not be liable except for the performance of such duties and obligations as are
specifically set forth in this Agreement.
5. The Escrow Agent is not a party to, and is not bound by or charged
with notice of, any agreement out of which this escrow may arise, including but
not limited to the Stockholder Agreement.
6. The Escrow Agent shall not be responsible for any failure or
inability of the other parties hereof, or any one of them, to perform or comply
with the provisions of this Agreement or the Stockholder Agreement.
7. In the performance of its duties hereunder, the Escrow Agent shall
be entitled to rely upon any document, instrument or signature believed by it in
good faith to be genuine and signed by any party hereto or an authorized officer
or agent thereof, and shall not be required to investigate the truth or accuracy
of any statement contained in any such document or instrument. The Escrow Agent
may assume that any person purporting to give any notice in accordance with the
provisions hereof has been duly authorized to do so.
8. The Escrow Agent shall not be liable for any error or judgment, or
any action taken, suffered or omitted to be taken hereunder except in the case
of its negligence or willful misconduct, nor shall it be liable for the default
or misconduct of any employee, agent or attorney appointed by it who shall have
been selected with reasonable care.
9. The Escrow Agent shall have no responsibility as to the validity or
value of the Shares. The Escrow Agent shall have no duty as to the collection or
protection of the Shares or income thereon, nor as to the preservation of any
rights pertaining thereto, beyond the safe custody of any such securities
actually in its possession.
10. The Escrow Agent or any successor to it as escrow agent hereafter
appointed may at any time resign and be discharged of the duties imposed
hereunder by giving notice to each of the parties hereto, such resignation to
take effect upon a successor escrow agent's acceptance of appointment.
11. Upon execution of this Agreement, the Escrow Agent shall receive an
acceptance fee in the amount to which the Escrow Agent and Buyer have heretofore
agreed together with reasonable attorney's fees incurred in connection with the
preparation of this Agreement.
2
<PAGE>
12. The Buyer will reimburse and indemnify the Escrow Agent for, and
hold it harmless against, any loss, liability or expense, including, but not
limited to, reasonable attorney's fees, incurred without negligence or willful
misconduct on the part of the Escrow Agent arising our of or in connection with
the acceptance of, or the performance of its duties and obligations under, this
Agreement, as well as the reasonable costs and expenses of defending itself
against any claim or liability arising out of or relating to this Agreement.
13. All notices, requests, demands and other communications provided
for by this Agreement (unless otherwise specified herein) shall be in writing
and delivered by mail, telegram, telex or personal delivery and shall be given
to all persons specified below, and shall be deemed given, if by telegram, telex
or personal delivery when received, and if mailed, when mailed postage prepaid,
registered or certified mail, and addressed to the respective parties as set
forth below or at such other address as any party may specify to the other
parties in writing (such change of address to become effective only upon receipt
of such notification in writing).
If to the Stockholder:
If to the Buyer:
If to the Escrow Agent:
14. This Agreement shall terminate upon the earlier of (a) the transfer
of the Stockholder's Shares to Buyer as provided in Section 3 of this Agreement
or (b) the termination all obligations of the Stockholder under the Stockholder
Agreement as provided therein. The Stockholder and Buyer shall give notice to
the Escrow Agent of a termination of this Agreement pursuant to clause 14(b)
above and, upon receipt of both such notices, the Stockholder's Shares held by
the Escrow Agent pursuant hereto shall be returned immediately to the
Stockholder.
15. This Agreement shall be governed by and construed and enforced in
accordance with the law of the State of Delaware.
3
<PAGE>
16. This Agreement may be amended, modified, superseded or canceled,
and any of the terms hereof may be waived, only by written instrument executed
by the parties hereto or, in the case of a waiver, by the party waiving
compliance. The failure of any party at any time to require performance of any
provision hereof shall in no manner affect the right at a later time to enforce
the same. No waiver by any party of any breach of any term contained in this
Agreement shall be deemed to be or construed as a further or continuing waiver
of any such breach in any subsequent instance or a waiver of any breach of any
other term contained in this Agreement.
17. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
18. Capitalized terms used herein shall have the meanings ascribed to
such terms in the Stockholder Agreement.
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
TEKNI-PLEX, INC.
By:
---------------------------------
Name:
Title:
[Name of Escrow Agent]
By:
---------------------------------
Name:
Title:
---------------------------------
[Name of Stockholder]
5
